| Metric | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥481.5B | ¥480.2B | +0.3% |
| Operating Income | ¥12.5B | ¥14.2B | -11.8% |
| Ordinary Income | ¥14.8B | ¥19.6B | -24.5% |
| Net Income | ¥10.3B | ¥13.8B | -25.6% |
| ROE | 3.5% | 4.9% | - |
FY2026 Q3 results: Revenue was ¥481.5B (YoY +¥0.3B, +0.3%), essentially flat, while Operating Income was ¥12.5B (YoY -¥1.7B, -11.8%), Ordinary Income was ¥14.8B (YoY -¥4.8B, -24.5%), and Net Income was ¥10.3B (YoY -¥3.5B, -25.4%), all declining. Gross Margin remained at 16.8%, and SG&A of ¥68.2B weighed on Operating Income. Total Assets were ¥495.6B (-1.1% from ¥501.2B a year ago), Net Assets were ¥295.9B (+4.1% YoY), and the Equity Ratio improved to 59.7% from 56.7% a year ago. Against Short-term Borrowings of ¥89.6B, Cash and Deposits were ¥2.8B, highlighting scarce liquidity. The company guides for FY Revenue of ¥650B (YoY +3.7%), Operating Income of ¥13.0B (+8.3%), Ordinary Income of ¥18.0B (-6.0%), and Net Income of ¥14.0B.
[Profitability] ROE 3.5% (significantly below the prior-year level); Operating Margin 2.6% (down -0.3pt from 2.9% a year ago, below the industry median of 4.9%); Net Margin 2.1% (below the industry median of 3.5%). DuPont decomposition: Net Margin 2.1% × Total Asset Turnover 0.97 × Financial Leverage 1.68x results in ROE 3.5%, with low profitability as the primary driver. Interest Coverage is 17.4x, indicating adequate debt service capacity. ROIC is 2.3%, reflecting low capital efficiency. [Cash Quality] Cash and Cash Equivalents ¥2.8B; Short-term debt coverage 0.03x, extremely low with liquidity risk present. While Operating Cash Flow (OCF) is not disclosed, Working Capital is tied up in Accounts Receivable of ¥138.5B and Inventories of ¥43.4B. [Investment Efficiency] Total Asset Turnover is 0.97x, less than one turn per year. Intangible Assets increased to ¥4.3B, up +26.6% YoY. The company holds Investment Securities of ¥50.5B and recorded Equity in Earnings of Affiliates of ¥2.9B. [Financial Soundness] Equity Ratio 59.7% (+3.0pt improvement from 56.7% a year ago, above the industry median of 48.7%); Current Ratio 187.4%, Quick Ratio 158.7%. While these appear sound, Short-term Borrowings of ¥89.6B constitute all interest-bearing debt, with a Short-term debt ratio of 100%. Debt-to-Capital is 0.68x and Debt/Equity is 0.30x, conservative but with pronounced maturity mismatch risk.
Although OCF is not disclosed, Cash and Deposits appear to have fluctuated from the prior fiscal year-end and decreased to ¥2.8B, with liquidity scarce relative to sizable Short-term Borrowings of ¥89.6B. Working Capital reached ¥132.2B, driven by Accounts Receivable of ¥138.5B and Inventories of ¥43.4B, indicating funds are tied up in the business cycle. Cash coverage of short-term liabilities is 0.03x, suggesting reliance on cash generation and rollover of borrowings. Treasury Stock changed by +¥19.5B from -¥21.5B to -¥2.0B, implying possible disposal or cancellation during the period, with capital policy changes potentially affecting cash flows. Equity in Earnings of Affiliates of ¥2.9B from ¥50.5B in Investment Securities and ¥4.6B in Non-operating Income such as dividend income are estimated to have contributed to cash inflows to some extent. Repayment of Short-term Borrowings and interest payments of ¥0.7B affect Financing Cash Flow, but continued reliance on borrowings is inferred due to insufficient cash. While the Current Ratio of 187.4% is sound, Current Assets are skewed toward Accounts Receivable and Inventories, posing challenges for rapid cash conversion.
Ordinary Income of ¥14.8B versus Operating Income of ¥12.5B implies a net Non-operating increase of about ¥2.3B. The main contributor is Equity in Earnings of Affiliates of ¥2.9B, with financial income such as interest and dividend income accounting for most of the ¥4.6B in Non-operating Income. Non-operating Expenses totaled ¥2.3B, including interest expense of ¥0.7B, resulting in a net Non-operating contribution supplementing Operating Income. Non-operating Income accounts for 1.0% of Revenue, and returns from ¥50.5B in Investment Securities are a support factor for Ordinary Income; however, the sustainability of equity-method investments and investees’ performance trends are risk factors. With an Operating Margin of 2.6% and a Gross Margin of 16.8%, operating profitability is weak, making the structure relatively dependent on Non-operating Income. Since OCF is not disclosed, the cash backing of earnings cannot be confirmed; given the low cash balance and reliance on Short-term Borrowings, the cash conversion of profits is estimated to be limited. The scale of Accounts Receivable at ¥138.5B is large, and collection terms and credit risk could affect earnings quality.
Liquidity is extremely tight with Short-term Borrowings of ¥89.6B versus Cash and Deposits of ¥2.8B, making refinancing risk the primary concern. With a Short-term debt ratio of 100%, maturity mismatch is pronounced and would be stressful in the event of rising interest rates or deteriorating market conditions. The low-margin structure, with Gross Margin at 16.8% and Operating Margin at 2.6%, poses risk that raw material prices, energy costs, and foreign exchange fluctuations will directly impact costs and further compress profitability. Dependence on Accounts Receivable of ¥138.5B exposes the company to collection delays and credit risk; lengthening collection periods or deteriorating customer credit may impair Working Capital efficiency and cash generation.
[Position within the Industry] (Reference information - compiled by our firm) Compared with the Food & Beverage industry (2025 Q3, 8 companies), issues are observed in profitability and capital efficiency. Profitability: ROE 3.5% (industry median 4.2%, below the IQR 2.3%–11.8%, positioning in the lower tier); Operating Margin 2.6% (industry median 4.9%, significantly below the IQR 3.2%–5.5%); Net Margin 2.1% (below the industry median 3.5%, IQR 2.6%–4.8%). Revenue growth rate +0.3% (well below the industry median +4.8%, IQR 3.0%–8.5%, in the bottom range of the industry). Soundness: Equity Ratio 59.7% (above the industry median 48.7%, IQR 46.9%–64.2%, in the upper tier); Current Ratio 187.4% (median 151.0%, within the IQR 139.0%–209.0%, sound). The Net Debt/EBITDA multiple is estimated to be high due to lack of cash, lagging the industry median of -1.96 (many net cash positions). Efficiency: Return on Assets (ROA) 2.1% (below the industry median 2.3%, IQR 1.6%–5.6%); Total Asset Turnover of 0.97x is at an industry-standard level. The company’s characteristics include maintaining industry-standard soundness indicators (Equity Ratio and Current Ratio) while ranking lower in the industry in profitability (margins and ROE) and growth. The low-margin structure and flat growth suggest weak competitiveness within the industry. Industry: Food & Beverage (8 companies); Comparison: 2025 Q3 results; Source: Compiled by our firm from publicly available earnings data
There are three key highlights. First, liquidity is scarce, with Cash and Deposits of ¥2.8B against Short-term Borrowings of ¥89.6B; the refinancing plan for borrowings and the company’s ability to generate OCF will determine future financial stability. Second, Operating Margin of 2.6% and Gross Margin of 16.8% are low; improving the efficiency of SG&A of ¥68.2B and enhancing cost pass-through capabilities are key to profitability improvement. The 2.3pt gap versus the industry median (Operating Margin 4.9%) suggests structurally weak competitiveness, and achieving the full-year Operating Income guidance of ¥13.0B (+8.3%) presupposes a significant improvement in Q4. Third, Intangible Assets increased markedly by +26.6% YoY; it is important to monitor their composition (licenses, software, goodwill, etc.), potential contribution to future earnings, and impairment risk. The dividend is projected at ¥75 for the full year (Payout Ratio 45.6%), but given the lack of cash, payment of dividends may impact financing, and the sustainability of the dividend policy depends on OCF and successful refinancing.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by our firm based on publicly available earnings data. Investment decisions are your own responsibility; consult a professional as needed before making any investment decisions.